Investing Guide at Deep Blue Group Publications LLC: Jakarta Tops League Table of Emerging World Cities

Jakarta. New York and London
remain the world’s most global cities, while select emerging-market cities led
by Jakarta, Manila and Addis Ababa strengthened their ability to challenge
global leaders in the next 10 to 20 years, according to this year’s Global
Cities Index issued by management consulting firm A.T. Kearney.

The 2014 edition of the Global
Cities Index also includes the Emerging Cities Outlook 2014, a forward-looking
measurement of emerging cities with the potential to improve their global
standing in the next few decades. Jakarta ranked first among 35 cities most
likely to move up the rankings.

John Kurtz, A.T. Kearney’s
head of Asia Pacific and president director of A.T. Kearney Indonesia,
explained that “the study now confirms what so many Jakarta residents know; the
city has its share of challenges but has become truly global in a variety of
ways and is now attracting talent from both the Indonesian and global business
and cultural communities. Recent leadership by Governor Joko Widodo and Deputy
Governor Basuki Tjahaja Purnama has lent further credibility and optimism to
the picture and it is very clear that Jakarta is on the rise.”

The Jakarta governor is
running for president this year and polls suggest he will emerge victorious,
being more popular than other serious contenders like the Great Indonesia Movement
Party’s (Gerindra) Prabowo Subianto and the Golkar Party’s Aburizal Bakrie.
Joko’s party, the Indonesian Democratic Party of Struggle (PDI-P), appears to
have won Wednesday’s legislative election convincingly, although not by as big
a margin as some expected.

The Global Cities Index,
conducted every two years since 2008, measures global engagement for 84 cities
on every continent, examining how globally engaged each city is across 26
metrics in five dimensions — business activity, human capital, information
exchange, cultural experience and political engagement. This provides a
holistic look at what differentiates cities in generating, attracting and
retaining global capital, people and ideas.

Mike Hales, A.T. Kearney
partner and study co-leader, said that “corporate executives use the
information in the Global Cities Index to help them choose the most suitable
locations for regional headquarters, research centers and operation hubs. City
mayors and urban economic development planners will find insights to inform
their improvement plans and investment
decisions to better compete in the global economy and against other global
cities.”

The Emerging Cities Outlook
measures the likelihood that a city will improve its global standing over the
next 10 to 20 years. It focuses on the leading indicators of business activity,
human capital and innovation.

According to Andres Mendoza
Pena, A.T. Kearney principal and co-author of the report, “as physical
distances become less relevant and global competition intensifies, cities in
low- and middle-income countries will increasingly jockey for position with one
another and with cities in higher-income countries.”

Jakarta’s strong showing on
the ECO signals that select cities in numerous countries throughout eastern
Asia are laying solid groundwork to become global cities and eventually raise
their ranking in the Global Cities Index.

Kurtz said that Jakarta was
the most likely city worldwide to advance its global position, driven by
significant increases across the leading indicators. In 2014, Jakarta showed
the greatest improvement in information exchange. The city is an increasingly
conducive setting for doing business, anchored by a high GDP growth rate. Human
capital, especially in the health care evolution metric, presents a major
opportunity for Jakarta to exploit, he said.

In order to capitalize on this
potential, according to Kurtz, Jakarta must provide greater transparency in
doing business, revamp the regulations in setting up businesses, and be more
open to the new global business environment.

Tangible examples that would
favorably impact Jakarta could include acceleration of MRT development, better
public transportation to support workers to commute between Jakarta and
satellite cities, development of the new port to increase throughput of export
and import, as well as integration of the infrastructure with central business
districts and industrial parks.

Jakarta would also need to
improve the presence of international education, an aspect where it still lags
behind other cities.

Consistent with previous
editions of the Global Cities Index, New York, London, Paris and Tokyo lead the
ranking. Among the top 20 cities, seven are in the Asia-Pacific region (Tokyo,
Hong Kong, Beijing, Singapore, Seoul, Sydney and Shanghai), seven are in Europe
(London, Paris, Brussels, Madrid, Vienna, Moscow and Berlin), and six are in
the Americas (New York, Los Angeles, Chicago, Washington D.C., Toronto and
Buenos Aires).

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Osaka City Plans Subway Operator Initial Offering to Chase Tokyo

Osaka, Japan’s third-biggest
metropolis, plans to sell the city’s 81-year-old subway operator in an initial
public offering to lure private investment after ceding ground to Tokyo.

Osaka plans to privatize the
operations, which could be valued at more than 600 billion yen ($5.9 billion),
in the next few years as part of efforts to become a global metropolis,
prefectural Governor Ichiro Matsui said in an April 8 interview. It may also
weigh a sale to private investors, he said.

Local governments in Osaka
prefecture, near the ancient capital of Kyoto and home to electronics makers
Panasonic Corp. and Sharp Corp., are stepping up sales of public assets to cut
debt. Osaka is privatizing state-run companies and talking to potential
investors including Caesars Entertainment Corp. on a planned $4.9 billion
casino resort as it seeks to overcome a declining population.

“I am ready for the subway
sale any time,” said Matsui, 50, who also is secretary-general of the Japan
Restoration Party. “Osaka city assembly members should all have a sense of
urgency to move this economic stimulus forward, as Osaka needs to bring in
economic revival.”

A proposal to privatize the
metro, which carries 2.24 million passengers daily, was submitted to the city
assembly in February 2013, according to documents posted on the Osaka
government’s website. The proposal, which is under discussion, would have Osaka
transfer the subway operations to a separate government-owned entity and then
fully privatize them, the documents show. It didn’t elaborate on the sale
method or valuation.

Shrinking Population

The Osaka subway, which
started operations in 1933, has nine lines running in the city and totaling 138
kilometers (86 miles). The privatization proposal will need endorsement by
two-thirds of the assembly to be passed.

Osaka prefecture’s economic
output dropped 6.2 percent to 36.6 trillion yen in the year through March 2012
from a decade earlier, according to the latest data compiled by the Cabinet
Office. That compares with a 0.4 percent decline in Tokyo’s output, to 92.4
trillion yen.

The population of Osaka
prefecture fell to 8.85 million as of March 1, down 0.1 percent from a year
earlier. It’s forecast to shrink another 5 percent by 2025, according to a
report compiled last year by the National Institute of Population & Social
Security Research. Tokyo’s population, which rose 0.5 percent to 13.3 million
in the year to March 1, is projected to decrease to 13.2 million by 2025.

“Osaka’s economic revival is
vital to helping Japan avert a default or economic crisis, as Tokyo’s growth
alone won’t be enough to bring momentum to the country’s overall economy,” said
Matsui. “Other prefectures should follow suit.”

Selling Assets

Osaka joins the nation’s
capital in seeking to sell transportation infrastructure. The Tokyo
metropolitan government has been studying a sale of its 46.6 stake in the
city’s subway operator, Governor Yoichi Masuzoe said March 19.

Matsui said in January his
government has been holding talks with global casino operators including
Caesars Entertainment, Genting Singapore Plc and MGM Resorts International on a
plan to build a resort complex in the Osaka Bay area that would cost at least
500 billion yen.

In February, Matsui said the
prefectural government plans to sell Osaka Prefectural Urban Development Co., a
commuter rail operator, to Nankai Electric Railway Co. for 75 billion yen.
State-owned New Kansai International Airport Co. is working with Sumitomo Mitsui
Financial Group Inc. to sell rights to operate two of Japan’s biggest airports,
people familiar with the situation said last month.

“By turning to a small
government from a big one, Osaka is shifting to companies those things that can
be left to the private sector,” Matsui said. “The casino-resort project,
airport privatization and subway sale have great potential to lure private
money into Osaka and its surrounding areas.”

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Deep Blue Group Publications LLC: The slumps that shaped modern finance

What is mankind’s greatest
invention? Ask people this question and they are likely to pick familiar
technologies such as printing or electricity. They are unlikely to suggest an
innovation that is just as significant: the financial contract. Widely disliked
and often considered grubby, it has nonetheless played an indispensable role in
human development for at least 7,000 years.

At its core, finance does just
two simple things. It can act as an economic time machine, helping savers
transport today’s surplus income into the future, or giving borrowers access to
future earnings now. It can also act as a safety net, insuring against floods,
fires or illness. By providing these two kinds of service, a well-tuned
financial system smooths away life’s sharpest ups and downs, making an
uncertain world more predictable. In addition, as investors seek out people and
companies with the best ideas, finance acts as an engine of growth.

Yet finance can also
terrorise. When bubbles burst and markets crash, plans paved years into the
future can be destroyed. As the impact of the crisis of 2008 subsides, leaving
its legacy of unemployment and debt, it is worth asking if the right things are
being done to support what is good about finance, and to remove what is poisonous.

History is a good place to
look for answers. Five devastating slumps—starting with America’s first crash,
in 1792, and ending with the world’s biggest, in 1929—highlight two big trends
in financial evolution. The first is that institutions that enhance people’s
economic lives, such as central banks, deposit insurance and stock exchanges, are not the products of
careful design in calm times, but are cobbled together at the bottom of
financial cliffs. Often what starts out as a post-crisis sticking plaster
becomes a permanent feature of the system. If history is any guide, decisions
taken now will reverberate for decades.

This makes the second trend
more troubling. The response to a crisis follows a familiar pattern. It starts
with blame. New parts of the financial system are vilified: a new type of bank,
investor or asset is identified as the culprit and is then banned or regulated
out of existence. It ends by entrenching public backing for private markets: other
parts of finance deemed essential are given more state support. It is an
approach that seems sensible and reassuring

But it is corrosive. Walter
Bagehot, editor of this newspaper between 1860 and 1877, argued that financial
panics occur when the “blind capital” of the public floods into unwise
speculative investments. Yet well-intentioned reforms have made this problem
worse. The sight of Britons stuffing Icelandic banks with sterling, safe in the
knowledge that £35,000 of deposits were insured by the state, would have made
Bagehot nervous. The fact that professional investors can lean on the state
would have made him angry.

These five crises reveal where
the titans of modern finance—the New York Stock Exchange, the Federal Reserve,
Britain’s giant banks—come from. But they also highlight the way in which
successive reforms have tended to insulate investors from risk, and thus offer
lessons to regulators in the current post-crisis era. Read
more

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Investing Guide at Deep Blue Group Publications LLC

Madrid Q1 office investment quadruples year-on-year

According to Savills,
approximately €200 million of transactions were carried out in the Madrid
office investment market during the first quarter of 2014, against a volume of
€50 million recorded in Q1 2013. The international real estate advisor
highlights that this figure represents almost 53% of the total office
investment volume recorded in Spain in this period, which reached approximately
€350 million.

The firm attributes this
partly to increased activity from international investors with its research
showing that overseas buyers have increased their market share in Q1 2014
accounting for 66% of the Madrid office transaction volume in this period,
against 54% in Q1 2013.

Luis Espadas, head of capital
markets at Savills Spain, comments: “The improved economic outlook has caused
international investors to turn their attention to Spain, and particularly
Madrid, and take advantage of low capital values, high yields and potential
rental growth in the short to medium term. In fact, due to a lack of product on
the market, the increased turnover in Q1 does not fully reflect the extremely
high demand we are seeing. This demand is making the sales process highly
competitive.”

In terms of yields, Savills
records prime CBD office yields at 5.5% and predicts that going forward these
may contract to 5% for prime product in prime locations.

On the occupier side, the firm
notes that total office take-up in Madrid reached approximately 105,000 sq m in
the first three months of the year, representing a 35% year-on-year decrease.
The research shows that this is due to a particularly strong first quarter in
2013 with several very large deals, including a 50,000 sq m letting by
Vodafone. However, in terms of the number of deals Q1 2014 recorded an 8%
increase and the firm predicts that going forward take up should total more
than 400,000 sq m by year end, exceeding 2013 levels.

Gema de la Fuente, head of
research at Savills Spain, comments: “We expect Madrid office take-up to pick
up going into Q2 14 with occupiers looking to benefit from low rental levels.
These have reached the bottom of the cycle in a number of areas and tenants
will want to take advantage of this before they return to growth once again.”

Savills research shows that
average vacancy rates on Madrid’s office market remain stable at 14%, in line
with Q4 2013, and top CBD rents in the city remaining unchanged
quarter-on-quarter, at €24.75 per sq/month.

If you have not invested in
the stock market investing but just now
planning on doing so, you can see what it is all about, what you can derive
from it and find out what it takes to make proper decisions on your own without
risking any money: follow Deep Blue
Publications Group LLC without having to constantly check for updates as
you will be notified by email whenever new content is uploaded.

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Today
I'll answer some tax questions-but first some tips for people who can't file
their returns by Tuesday.

For
federal
taxes: If you can't file your return by Tuesday, request a six-month
extension by filing Form 4868 electronically or by mail. See the form for
instructions. If you file this form by April 15 and your tax return by Oct. 15,
you will avoid a late-filing penalty.

However,
if you owe additional federal tax for 2013, you must pay it with this form by
April 15 to avoid interest and possibly a late-payment penalty.

You
can avoid this late-payment penalty
(but not interest) if at least 90 percent of your total 2013 tax liability is
paid by April 15 through payroll withholding, estimated tax payments or
payments made with Form 4868.

If
you haven't completed your return, "the best thing is to pay in about 10
percent more" than you expect to owe, says Michael Gray, a San Jose
certified public accountant.

For
California taxes: There is no need
to request an extension; you automatically get one until Oct. 15. However, as
with federal taxes, you must pay at least 90 percent of what you owe by April
15 to avoid a late-payment penalty.

You
can make this payment online from your bank or savings account without a fee
using the Franchise Tax Board's Webpay system-or with a fee by using your
credit card. Or you can mail a check with Form FTB 3519. (Certain high-income
taxpayers must make this payment electronically.)

Q:
Don M. asks, "We sold our income property in 2013. Now we owe a
substantial sum for the 3.8 percent Obscure tax! We are learning that since we
were active owners, materially participating in managing the property, we may
not have to pay the tax. We have checked IRS publication 925 and get mixed
messages. We find that the hours needed to qualify for ' active, material
participation ' range from 100 + hours to 500 hours. Can you enlighten us?
"

A:
Don is asking about the new 3.8 percent tax on net investment income that took
effect Jan. 1, 2013.

It
applies to people who have net investment income and adjusted gross income over
a certain limit ($250, 000 married filing jointly and $200, 000 for singles).
It is also known as the Medicare surtax or the Obscure tax because it was part
of the Affordable Care Act.

The
tax applies to income from investments such as interest, dividends, capital
gains, rents and royalties. The 3.8 percent tax is applied to either net
investment income or the amount that a taxpayer's modified adjusted gross
income exceeds the thresholds stated above for their filing status-whichever is
less.

The
tax generally applies to income and capital gains from rental property, with a
few limited exceptions. Don "would probably have some pretty significant
hurdles to overcome to avoid the 3.8 percent tax on net investment income for
the sale of the rental property," says Mark Luscombe, principal analyst
with CCH Tax and Accounting.

He
would have to meet two separate tests.

First,
he would have to qualify as a real estate professional under the passive
activity loss rules (spelled out in Publication 925.) To qualify, more than
half of the personal services he performs in a year would have to be in a real
estate trade or business in which he materially participates. And, the hours
engaged in such services would have to total more than 750 per year. He could
group various real estate activities together to meet this test, but it seems
this might be his only real estate activity, Luscombe says.

Second,
he would have to meet a 500-hour test under the net investment income tax rules
(spelled out in the instructions for Form 8960). Under these rules, he must
participate in rental real estate activities for more than 500 hours per year
(or more than 500 hours per year in five of the last 10 years).

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Investing Guide at Deep Blue Group Publications LLC: How to tap into your small pension pots

There
will be a short wait – a year, to be precise – before savers are finally able
to dip into all of their pensions for however much they require, whenever they
please.

That
dramatic relaxation of government rules, which ends the compulsion to turn a
pension fund into small monthly payments during retirement, was the highlight
of the Budget 11 days ago. The Government will now give pension providers time
to adjust their systems and practices.

However,
many of the 320,000 people preparing to retire over the next 12 months need not
delay their plans. Last Thursday a number of temporary measures were introduced
that will give pensions freedom to tens of thousands of people.

These
new rules are particularly beneficial to those with small subsidiary pensions
of less than £10,000 which were saved alongside a final salary pension. The
over-60s can now cash in up to three pensions of this size, taking a quarter of
each tax-free.

Several
other measures, detailed below, also give savers greater choice over how to use
money reserved for later years. They will enable some to clear mortgage debts
or fund activities or gifts to children that were previously thought to be out
of financial reach.

The
Budget changes also represent a call to action for workers in their 50s. Many
pension plans are designed specifically to be converted into an annuity when
the saver retires.

In
addition, the City watchdog will this summer initiate an inquiry into old pension plans and other
investments sold before the turn of the millennium, which could offer an escape
route to those trapped in high-charging policies. However, some older policies
contain perks such as guaranteed payout rates that turn each £100,000 into as
much as £11,000 a year.

David
Smith of investment firm Bestinvest said: “Don’t make a snap decision on the
back of the Budget. To get the most from your savings while paying the least
amount in, you’ll need to weigh up how much you will withdraw in retirement and
when – then adjust your investment strategy accordingly.”

In
short, now is the time for a financial spring clean: so dig out old policy
documents and follow the rough guide on this page.

The
Telegraph was inundated with pension queries in the aftermath of the Budget. We
have endeavoured to answer many of them, which will be published online
tomorrow, with the aim of providing a reference for all readers.

To
tide over savers until the pension unshackling next year, the Government has
tinkered with the existing rules.

Those
with less than £30,000 in total pension savings can take the entirety as cash,
subject to income tax at marginal rates on three quarters of the money. Previously
the limit was £18,000.

Many
will still find that a small amount of final salary benefit is enough to breach
the limits. Around £1,500 of annual income from one of these pensions, also
known as “defined benefit” schemes, is worth £30,000 in the Government’s eyes,
according to Hargreaves Lansdown.

In
2011 rules were introduced to unfetter the smallest subsidiary pensions. But
they were restrictive, allowing only two pensions of no more than £2,000 to be
taken as cash lump sums. Savers with slightly larger funds were asked to buy an
annuity paying as little as £10 a week.

On
Thursday the Government increased the limits so savers can take three pensions
worth no more than £10,000 as cash, subject to tax on three quarters of the
fund. The Treasury estimates that 32,000 people will benefit as a result.

Another
development is rules around “flexible drawdown”, where a pensioner leaves their
fund invested in the stock market or other assets and takes an income. Savers
with £12,000 a year of secure pension income from other sources (such as a
final salary or state pension) have entire freedom to access their money.

However,
this does incur charges, typically of around £300 or more, as pension providers
are loath to spend money setting up a plan only for the money to disappear
shortly afterwards.

An
estimated 150,000 people have already started the process of buying an annuity.
Last week, savers on the verge of retirement were hit by chaos across the
pensions industry, which is scrambling to adjust to the radical shake-up
announced in the Budget.

PLANS FOR 2015...

If
you can afford to wait to retire – or have other money to see you through –
leave your pension untapped until 2015.

There
are alternatives to annuities if you need the income. Most pension providers
allow customers to use “capped drawdown”. Here the pension stays invested and
income of around £7,000 can be taken from each £100,000 in a fund at age 65.

On
Thursday this cap was raised to nearly £9,000 per £100,000. The impediment to
taking this route is charges, which can be as much as £700 a year.

Some
providers, such as LV=, Just Retirement and Aviva, provide “fixed-term”
annuities. Billy Burrows of Annuity Line, the advisers, said: “At the moment
the minimum term is three years. Insurers should offer a one-year option – this
would bridge the gap until everyone had total flexibility. I think this is
bound to happen soon.”

…AND BEYOND

Savers
with more than a year to retirement must urgently check their investment
strategy. Company pension savings, in particular, are usually fed into
“lifestyle” funds. An estimated £165bn is in these funds, which are designed to
reduce risk as a customer closes in on retirement by selling shares and buying
bonds.

However,
bond prices rocketed in the wake of the financial crisis as investors sought
safe havens. Money in bond funds is on a “cliff edge” – if markets swing back
the pensions of savers five, 10 or 15 years from retirement could suffer.

Laith
Khalaf, a pensions analyst at Hargreaves Lansdown, said: “Absolutely everyone
who is invested in a default fund in their company pension scheme should dust
it off and take a close look. The fund may no longer be fit for purpose now you
don’t have to buy an annuity. This also applies to pension plans set up with
previous employers.”

Gather
together any old pensions too. The City regulator is concerned that these plans
are neglected and charges are too high. This summer it will initiate an inquiry
into pensions sold before the turn of the millennium.

Run
old policies with anachronisms in the terms and conditions under the eyes of an
expert adviser listed on Unbiased.co.uk. Look for a “chartered financial
planner”. Some antiquated policies contain valuable guarantees or “bonus”
payments that kick in at age 60 or 65. Others penalise customers for switching
to cheaper providers. Work out whether – and where – you can obtain a better
deal.

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The Most Important Thing to Learn From the Man In Charge of $150 Billion

Investing Guide at
Deep Blue Group Publications LLC - Many
individuals and investors know of the richest men in finance like Warren
Buffett, George Soros, and Carl Icahn, who have a combined fortune of more than
$110 billion. But there is something everyone can learn from the man who runs a
hedge fund with over $150 billion, and who is worth $14 billion himself.

The man

Ray Dalio sits
atop Bridgewater Associates, which is the Connecticut hedge fund he founded in
1975. It is now the biggest fund in the world, and manages money for pensions,
university endowments, and sovereign wealth funds for countries. In all
likelihood, many readers unknowingly have had their finances in one way or another tied to Dalio at
one point in their life.

Yet unlike many
of those in corporate finance, Dalio is a naturalist and a man who was once
described as "Steve Jobs with a
business school degree." He enjoys meditation, and seeks to tear down
the standard walls of corporate culture, which often characterize firms in the
financial industry, by employing a call for an open atmosphere.

In 2011 Dalio
released a 123 page paper simply entitled Principles where he outlines not only
what his own principles are, but also why he believes they are important. This
followed his remarkable success during the financial crisis -- he predicted the
collapse of the housing market in 2007 -- where many began to learn of his
astounding success.

In fact in 2008,
a year in which the S&P 500 plummeted by almost 40%, his firm had a return
of 9.5%. In 2010 the return of his firm reportedly topped 45% and delivered $3
billion directly to Dalio himself.

And while the
firm is notoriously tight lipped about the moves it makes when it comes to
managing money and where it allocates its resources, Dalio is happy to share
the broader principals which guide his investing and his life, and he suggests
"there are five things that you have to do to get what you want out of
life."

The five critical things

Dalio goes on to
say "The Process," he
outlines consists of five critical and unique steps:

1. Have clear
goals.

2. Identify and
don't tolerate the problems that stand in the way of achieving your goals.

3. Accurately
diagnose these problems

4. Design plans
that explicitly lay out tasks that will get you around your problems and on to
your goals.

5. Implement
these plans—i.e., do these tasks.

He then
highlights that all five of these steps are unique, meaning the goals must be
identified apart from the problems, each step requires different "talents and disciplines," and
the process must be though through rationally instead of emotionally.

Dalio notes
setting goals is often the hardest part of the process, but it's actually the
most important, as "in order to get
what you want, the first step is to really know what you want." From
that point forward, the rest of the steps will in turn allow individuals to
operate in a way ensuring the goals are realized.

The most
important point

There is much to
learn from Dalio -- after all the document is 123 pages -- but his first point
is a critical one. All too often problems can be identified and diagnosed,
plans can be designed, and steps can be taken all without a clear goal in mind.

In investing it
is easy to see the stock market is falling, which is often viewed as a problem,
and in turn seek to cut losses by selling out of the market entirely. But when
the goal is financial security for retirement, which could still be decades away,
it may in fact provide more reason to put money into the market.

At the height of
the financial crisis in 2008, Warren Buffett said: "A simple rule dictates my buying: Be fearful when others are
greedy, and be greedy when others are fearful." This statement is a
powerful example of how he and why he has been so successful, because his
decision was ultimately guided by the goals he had set.

While the need
to approach life with clear goals in mind likely isn't groundbreaking news, it
is something everyone needs to be reminded of.

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Market May Have Found a Bottom

NEW YORK (Investing
Guide at Deep Blue
Group Publications
LLC) -- On Thursday, the market was searching for a bottom. Friday saw that
bottom made.

All the
indexes ripped higher out of the gate. The oversold condition, mentioned
Thursday, in the Nasdaq and the Russell 2000 paved the way for the move higher.

The
S&P 500 daily trading range is the setup for the algorithm machines and the
hedge fund community.
The S&P came within 10 points of its sell range on Friday and within 10
points of its buy range. Volatility on a daily basis is the theme.

The DJIA
was up triple digits at one point and the other indexes were also up huge. A
late-day selloff paired those gains. The Nasdaq
and Russell 2000 went red again
before closing slightly higher.

The DJIA closed at 1623.06, up 58.83
points. The S&P 500 closed up 8.57 points, at 1857.62. Even though the
Nasdaq and Russell 2000 closed slightly green, those indexes were still well
into oversold territory, according to certain internal indicators. We should
expect a continued move higher next week in the indexes, based on these
conditions.

This
market is not for the faint of heart. This is a trader's market, pure and
simple. Just when the bears were out in force this week, calling for market
tops, we are nowhere near that type of signal after Friday's market rebound.

Based on
internal signals, the trend remains bullish. As I have stated on different occasions,
the trend is a three month or more month time frame.

The
S&P 500 is not close to that bearish signal. At one point Friday, the S&P 500 index
came within 12 points of its all-time closing high. That is certainly not a
bearish sign.

Until this
market breaks the necessary technical levels to become a bearish trend, traders
and investors alike need to play this market from the bullish perspective. If
not, money will be lost and many long opportunities will be missed.

Next
Tuesday, the markets begin the month of April with a clean slate. There will be
no more quarterly squaring up of the books.

This has
been a flat stock market for the first three months of 2014. Gold and utilities
have been the leaders. The dollar and interest rates are burning. The consumer
is feeling the inflationary pinch. This is not a good recipe for continued
stock-market growth. At some point, the markets will reflect this negative
headwind. Until then, let the markets be your guide, as the trend is still
higher.

Two positions
that I mentioned in Thursday column that were purchased and sold on Friday were
Las Vegas Sands (LVS_) and Hologic (HOLX_). Both were sold for nice gains.

On Friday,
Orbitz (OWW_) and Safeway (SWY_) were added as long purchases. Currently, both companies
are extraordinarily oversold, according to internal indicators.

At the
time of publication, the author held positions in OWW and SWY, but positions
may change at any time.

This
article represents the opinion of a contributor and not necessarily that of
TheStreet or its editorial staff.

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comments
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Are Stocks in for Tough Sledding?

Investing
Guide at Deep Blue Group Publications LLC - After
posting scorching returns in 2013, stocks' flat performance in this year's
first quarter seems anticlimactic. Many investors were no doubt expecting the
good times to keep on rolling, while valuation-conscious types might have
expected an even bigger performance drop-off.

With
the first quarter receding in the rearview mirror, we decided to get
Morningstar readers' takes on the action. What has been the biggest surprise
thus far in 2014, and (cue the crystal balls) what do they expect will happen
during the rest of the year?

Some
investors said the first-quarter uptick in stock market volatility was indeed jarring.
Others said they were surprised to see decent performance from their bond
holdings so far in 2014, given the widespread pessimism that has hung over the
fixed-income market for several years running.

Looking
forward, many posters said they don't have high hopes for stocks for the rest
of the year; a frequent refrain was that a still-sluggish U.S. economy will
make it difficult to justify higher stock prices when they're already on the
lofty side.

To
read the complete thread or share your biggest investment surprise so far in
2014's early days--or your expectation of what lies ahead--click here.

'Bonds
Have Behaved Better Than I Expected'

Stocks'
herky-jerky pattern--up big one day, down big the next--has come as an
unwelcome development for homebrewer in 2014's early innings. "My biggest surprise is how volatile
the market has been; I expected some but not this much. I think fear is driving
this market more than reason. The fear of being in the market when bad news
hits causes selling and the fear of not being in the market when it goes up is
causes buying."

Dawgie,
meanwhile, has been surprised by the continued poor performance of emerging-markets
stocks and bonds and the continued relatively poor performance of foreign
stocks in general compared with domestic [stocks].

Meanwhile,
several posters said they expected fixed income to be their portfolios' major
pocket of weakness in 2014, but bonds have actually done quite well.

"I was surprised by interest
rates, not because they fell, but how far down they went," said Darwinian.

BMWLover
observed, "I'm surprised that the
weather has sapped as much out of the economy as it has, especially since the
west was actually warmer and dryer than average. The result was that bonds have
behaved better than I expected. I was expecting to see the 10-year Treasury
bond [yielding more than] 3% at this point in time." (The 10-year
Treasury is currently yielding about 2.75 %.)

Ditto
for artsdoc, who wrote, "I'm a bit
surprised that my fixed-income side of my portfolio has returned more than my
equity side."

But
even as some posters were bracing themselves for poor fixed-income performance
and better returns from their equity portfolios, other respondents said stocks'
meh performance didn't surprise them at all. "The biggest first-quarter
surprise for me is that the correction didn't arrive yet, and some nice gains
have been made," wrote sportsden.

On
the same page is atomiccab: "I am
surprised that I am even with my end-of-year numbers. I expected the markets to
go down after such a large runup last year."

Several
posters pointed to REITs as being a pocket of unexpected strength thus far in
2014.

Dawgie
was one of the respondents who had been expecting to see REITs revert to the
mean. "Although they were off in
2013," this poster wrote, "their
five-year returns are still very high."

Rathgar
hoped to add to the asset class as valuations improved, but that hasn't panned
out. "I bought REITs (Vanguard REIT
Index ETF (VNQ)) low in December and planned to add monthly, expecting lower
prices. With REITs up 10% I might have to add to another asset class."

Audreyh1
thinks she can explain REITs' late 2013 downturn--and subsequent bounceback. "Things that come under a lot of
selling pressure late in the year--such as REITs and municipal bonds in
2013--seem to pop early the next year because the tax-loss selling is
over," she said.

'Going
Forward Will Be a Bit of a Slog'

Looking
forward, many investors who posted predictions said they're not expecting a lot
from either the stock or bond market for the rest of the year.

"I suspect that going forward
will be a bit of a slog,"
wrote artsdoc. "Valuations are a lot
higher than last year at this time, and I'm not expecting much more than
treading water from my fixed-income investments."

On
the same page, FidlStix quipped, "This bull's running low on testosterone.
Having said that, I don't think the trap door is going to drop out from under
the market in 2014--unless we have a world crisis that makes Ukraine look like
a romp through the playground. We'll end the year about where we started. It'll
be a bouncy year, though. Investors with strong stomachs who can ignore the
greater volatility will do OK. Those who can't are likely to sell at the wrong
time and shrink their nest eggs."

Bnorthrop
believes that the rest of the year will feature a continued push-pull between
stocks and bonds. "I expect 2014 to
remain in a relatively flat dynamic tension between stocks and bonds. Continued
suppression of interest rates lead to risk-on investments; Fed
rumblings/expectations of rate increases lead to risk-off maneuvers. Slow-cook
economic improvement gives the nod to equities."

Jomil
agreed that the markets will muddle along, nothing more. "I expect more of the same because we are in a trader-controlled
market with their ability to create and use volatility to an advantage in
finding fleeting pockets of value to buy and sell in milliseconds before the trend
changes. To beat them at this game, one has to buy and hold at lower cost, be
lucky, or have their resources."

Homebrewer
offered a host of macroeconomic and market predictions, including this: "If the total U.S. market ends at or
above zero, I will be surprised."

'There
Will Be No Buyers Left'

Yet
other investors said they're even more pessimistic about stocks' prospects.

Sportsden
foresees a correction later in the year. "I
expect a strong correction by October, since the market seems to be ahead of
itself--but, of course, nobody really knows."

Also
expecting a big stock drop--not imminently but eventually--is Darwinian. "I anticipate more drops, probably of
increasing depth, followed by partial or full recoveries. The market is
overpriced, but it can't plummet yet, because there is still too much money on
the sidelines. Once this has been sucked in, through 'buy-on-the-dips'
strategies, then the big dive can begin, because there will be no buyers
left."

Homebrewer
advised that investors coming late to the party (and asset-flows data indicate
there are many of them) could get burned. "People
entering the bull late will drive P/E ratios up and get burned when the bear
takes hold."

Meanwhile,
BMWLover anticipates that a correction could be right around the corner. "Stocks, I keep waiting for them to
correct," this investor wrote. "I
think we'll see that in the second quarter with the first quarter's earnings
reports giving sellers a reason to pull back and buyers pause."

So
what will perform decently? Rathgar thinks that unloved inflation hedges may do
all right. "I think inflation hedges will have a good year since most
investors aren't thinking about inflation and these investments were cheap
coming into 2014--REITs, commodities, Treasury Inflation-Protected Securities,
and global bonds.

'No
Idea'

Finally,
it wouldn't be a "make your
predictions" thread without at least a few investors commenting on the
folly of trying to predict the market's direction.

Dawgie
wrote, "What do I expect for the
remainder of the year? No idea. I don't put much credence in market forecasts,
and I certainly lack the insight to make any."

And
Chief K joked, "My expectation for
the market: About half of the people who buy shares of stock in a particular
company will get 'the better end of the deal.' About half of the people who
sell shares of stock in a particular company will get'the better end of the deal.' I won't know which is
which until after it's all over."

This
investor's takeaway? "Index, repeat
Index."

Asset-allocation
parameters, not market prognostications, guide the way for Audreyh1.
"Fortunately my investment strategy doesn't require me to guess which
asset class will outperform. Whatever happens, I'll rebalance next January if
my AA is sufficiently out of whack by then. What really surprises me is that
the first quarter is almost over! Time flies!"